Giddy up! Shorts take profits; buyers fishing

Given the extent of the declines I would be surprised if we saw a "V"-reversal from here, but a small handle which held the bulk of yesterday's gains would be very bullish indeed (or a small rise - then a handle). Shorts were likely responsible for most of the buying/covering action. Large one day gains like Tuesdays' after an extensive decline, the Russell 2000 is a good example, is more bearish than bullish.
However, Tuesdays' action is a good start, defining the lows as a basis for a bottom on which future risk can be calculated. Tuesday's lows are now a buying point for sideline money waiting to get in. Shorts will be wary of entering a new positions unless there is a decisive break of its low. Together there is a psychological advantage for bulls. The Russell 2000 fell just shy of a bearish "Three Line Strike", but the suggestion is there.

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